Would You Like Fries

With That?

By David Goodis,
President & CEO, Revelex

Now that you are using Power Agent to book your cruises electronically, in addition to the countless cruise bookings coming in to your Web site while you sleep, the question is, How can you make more money?

Well, for starters you can market more effectively and in doing so increase your gross margin, or you can begin to look at seriously selling other products along with that 7-night Caribbean cruise. One simple word that comes to mind: Insurance! This product can be sold electronically, as well, and can have such a positive effect on your bottom line that you would be shocked to learn of the growing number of agencies that rank it second in line of products sold to customers.

The reason is simple: Margin and plenty of it. Many agencies are making a fortune selling this product and it’s one that every customer should purchase in any case. Perhaps you only sell insurance to one in 10 customers. Obviously, you know that the margins are good. So why not sell more insurance? Aggressive agents know the profitability of selling “opt out” insurance. In other words, the price of the insurance is included automatically in an agent’s online price quote. Clients who prefer not to have insurance may “opt out” by checking a box — but the majority doesn’t do this. That’s why it’s much more profitable to sell “opt out” as opposed to “opt in” insurance.

If you are a home based leisure agent, you understand that it’s all about gross margin. You may have given up ARC for CLIA because you were tired of pushing zero commission products or trying to justify service fees to clients. Yes, larger, full service agencies are important, but they serve a different market. Your focus should be strictly on selling the products and services that will make you the most money. Any successful home based agent will tell you that aside from technology, it’s the up sells, add ons and marketing savvy that makes the year great. Notice that I say great — not decent. Which one are you working toward?

Let’s take a look at the cycle of a new agent through the various pitfalls of the marketplace. I’m not even going to address agents who feel that they don’t need technology, as their days are numbered. Rather, I will focus on agents who have a bookable Web site and back office sales tools such as Power Agent. The very first question is always, “How can I increase the traffic to my Web site and acquire more online sales?”

For starters, all marketing should be done online. Any co-op dollars you get from the cruise lines should be geared toward online efforts because this will be your area of greatest growth. Watch your marketing campaigns closely because you can burn through money quickly online. Be realistic with your budget. I’m sorry to say that $300 a month just won’t cut it online. Look to allocate a minimum of $1,000 per month and remember that your only big expense is your marketing and sales are a function of marketing. Once you begin to grow you will spend more each month on this channel, so be happy when your sales justify the increased spending online. If you want to feel better take a close look at what Expedia spends each month on marketing and you’ll soon understand what I’m talking about.

The second area of great concern lately is rebating. The cruise lines are taking a very harsh stance toward this practice and it’s about time. Agents were literally giving away the farm for no good reason other than competitive pressure online to offer the lowest price. Yes, Revelex built most of the tools needed to offer these competitive prices online but the yield filters were never meant to be abused. Rather they are a way for agents to automate their booking process while managing their online campaigns. Every good salesperson needs to talk turkey and occasionally sharpen their pencil, but why give it away? Although these new nonrebate policies were originally met with skepticism, they are now being viewed as very positive measures.

Depending on which research firm you follow, it’s clear that the great majority of cruise sales are concluded on the telephone. However, in many cases 100% of the sales leads are generated online. This spells out a serious opportunity for agents since they can up sell the customer and add on insurance, shore excursions, pre or post hotel stays and many other revenue-generating items for the agency. Remember that $1,000 I spoke of? Guess what? You paid to speak to each and every prospect who called you or sent in a request for information, so treat each lead like a piece of gold. People who shop online have very little patience and expect fast and reliable service. Since most of them have never cruised before, they need to be “sold” a suitable package. The good news is that they are definitely “buyers.”

Lastly, with a proper bookable Web site, back office tools, marketing program and resources to market online the biggest problem our travel agent subscribers have is their ability to continue to deliver agents service and support. I often hear from customers that they have “500 leads in the cue and 50 quotes out.” Since most agents will attest to the fact that the majority of the work is done after the sale, it’s hard to keep up with all the action once you venture online. This is the best problem an agent can have, but a problem nonetheless. Be honest with yourself as to your capacity to handle the workload, since customers have a good memory for bad service.

One more question: Would you like fries with that?